Order paper answer sheds light on government’s knowledge of F-35 cost

An answer the government provided to the opposition on the F-35 has raised fresh questions about what cost figures the defence minister would have known before announcing Canada was going to buy 65 of the fighter jets.

In a response to an order paper question put forth by the NDP’s Matt Kellway, the office of associate defence minister Julian Fantino replied that defence minister Peter MacKay would have seen costing information for the F-35 a month prior to the government’s July 2010 announcement that it planned to buy the fighters.

That information came by way of the 2009 Selected Acquisition Report, a document released every year by the U.S. Department of Defense that summarize the latest cost estimates, schedule and performance status of a given program. Fantino’s office told Kellway that in June 2010, “Ministers were informed of the costing information for F-35A variant using data from the 2009 Selected Acquisition Report [SAR].”

The 2009 SAR predicted that production would be at about 80 planes each year from 2016 to 2034.

Jay Paxton, a spokesman for MacKay’s office told iPolitics Monday that, “in 2010, the government announced its intent to purchase the least costly variant of the aircraft at the most cost effective point of production and ensured the flexibility necessary to shift our purchase should the production schedule change.”

The government has argued that its ability to shift its purchase would enable it to hit a sweet spot when production is at its highest and costs are lowest.

However, even the 2009 SAR predicted a continual unit price rise as the production years continued.

“They should have recognized that the costs continued to rise,” Alan Williams, former assistant deputy minster of materiel at the Department of National Defence, told iPolitics. He also pointed out that the same document showed the average unit procurement cost was then hovering around $113 million.

“If I was using the 2009 SAR and I was being as honest as I could, and I knew what was being asked, I’d use $113.6 million. That’s what I would do,” Williams said, adding the unit recurring flyaway cost was a “component” figure.

Kellway also took issue with how the government has portrayed the price in an interview Monday.

“What they keep doing is providing that one cost figure that does not reflect in any meaningful or practical way what the cost of the planes are going to be,” he said. “They’re not providing the cost that the planes are actually going to be to Canadians to purchase.”

The government also told Kellway in its answer on the order paper that it had received 15 formal bilateral briefing packages on the Joint Strike Fighter program since October 2006.

“Ministers are not directly informed of the receipt of formal communications as they are received by the Department of National Defence,” Fantino’s office said in its reply. “These communications are processed by the Department and passed to the Ministers as required in separate briefings and communications materials.”

Kellway pointed out that, from the response, he could see only three instances where ministers had been briefed with the information the department had formally received.

“I find it a bit strange, actually that departmental officials only saw fit to advise ministers three times with so much information at their hands,” he said. “I think we’re left with a case where either the minister is not communicating appropriately and responsibly with his own department or there’s something a bit strange with that response, frankly.”

For Williams, it amounts to a failure at the departmental level.

“These ministers all have staff, right? They have a bunch of people that are supposed to be there to protect the interest of the ministers,” he said. “Where are these guys? What are these guys being paid to do if not to sort of challenge, question, provide some reasonable rigor before you get the minister to sign on a document or speak in public? I find that unconscionable.”

Since the release of the auditor general’s spring report on the F-35 purchase, the government has committed to establishing a fighter jet secretariat within the Department of Public Works and Government services to oversee the procurement. That secretariat will report to Parliament with updated cost figures every year.

Still, Kellway isn’t convinced it will be effective.

“There’s this pretense… that there’s some refinement of the costing to be done by this Secretariat, and… what these responses prove is that there really is no refinement to be done,” he said. “They’ve had the select acquisition reports, they’ve been getting them for years, they’ve been getting life cycle costing for years in a very comprehensive and detailed way, and to suggest that those numbers need to be refined is disingenuous.”